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August 4, 2016

MetLife 2Q profits sink, cost cutting planned

Metlife has reported a steep decline in second quarter net income, attributed in part to plans to sell part of its U.S. retail annuity business.

For three months ended June 30, Metlife reported net income of $64 million, or 6 cents a share, down from $1.04 billion, or 92 cents a share for the same period last year.

The company, which has major operations in Bloomfield, also announced on a conference call with investors Thursday, that it will cut costs by 11 percent, or $1 billion, by 2019, including through layoffs, according to the Wall Street Journal.

Net income includes a $2 billion non-cash charge resulting from the company's annual review of actuarial assumptions for its retail variable annuities business. MetLife said it moved up from the third to the second quarter this year’s annual variable annuity actuarial assumption review because of company's previously announced plan to sell a substantial portion of its U.S. retail business.

"Second quarter results were negatively impacted by market factors, our annual variable annuity actuarial assumption review, and reserve adjustments resulting from modeling improvements in our reserving process," said Steven A. Kandarian, chairman, president and CEO, MetLife Inc. "At the same time, we continued to make significant progress on actions intended to create long-term shareholder value, including our ‘Accelerating Value’ initiative and the planned separation of a substantial portion of the U.S. retail business."

The company said it will conduct the remainder of its annual actuarial assumption review, which addresses products other than variable annuities, in the third quarter.

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